Lockdown drags down Runner’s July-Sept profits
With 41 days of the quarter lost to lockdowns, two-wheeler businesses suffered losses as commercial vehicle units posted higher profits
Runner automobiles' consolidated earnings per share dropped to Tk0.53 in the July-September quarter, from Tk0.77 in the corresponding period last year.
The drop in profits was due to a series of Covid-led lockdowns that slowed down the company's business recovery. Besides, the movement restrictions affected Runner's manufacturing, sales, collection and other market activities in the first quarter.
Over the period, Runner's commercial vehicle segment, which runs under its subsidiary Runner Motors Ltd, showed positive outcomes as cargo transports were out of lockdown purview.
But the passenger vehicle segment that includes Runner, Aprilia, Vespa, UM two-wheelers and Bajaj three-wheelers struggled in line with the market, the company informed its shareholders in its financial disclosure on Thursday.
The mother company that operates in the passenger vehicle segment suffered Tk0.10 in loss per share in the July-September quarter, while no lockdown helped it post Tk0.20 in earnings per share in the same period of 2020.
In the meantime, its commercial vehicle subsidiary Runner Motors Ltd, which distributes Eicher trucks, posted profit growth that slightly offsets the passenger segment losses in the consolidated statement.
At the end of September, Runner's consolidated net asset value per share that includes the same of all subsidiaries stood at Tk65.69, up from Tk65.16 three months ago.
The listed company also decided to extend its deadline to utilise the fund it had collected from the stock market for investing in manufacturing facilities up to the end of 2022, subject to the approval of shareholders and the regulator.
Initially, Runner was pursuing an ambitious plan to pioneer two-wheeler engine manufacturing in the country, like it pioneered two-wheeler manufacturing in the early 2010s.
But it halted the plan later considering the lack of the needed scale, and focused on three-wheeler manufacturing in technical collaboration with the world's largest three-wheeler company Bajaj, and invested the shareholders' money there.
The accomplishment of the three-wheeler plant has been delayed by several months as most of the capital machinery supplying countries suffered lockdowns this year and the suppliers took additional time.